Japanese women at the Hirakata Fish Market in Kitaibaraki, Ibaraki Prefecture for the first time since the March 11 earthquake and tsunami disaster.

The government also said it would look at widening its testing to cover a larger area after raised levels of radioactive iodine were discovered in a small fish caught off Ibaraki prefecture, south of the plant.

The move came as shares in Tokyo Electric Power Co. plunged to a new low of 362 yen -- their lowest ever level -- amid concerns the operator of Japan's crippled nuclear plant will face huge compensation bills.

The embattled company has lost more than 80 percent of its value since the March 11 quake and tsunami knocked out reactor cooling systems at the Fukushima nuclear plant, triggering explosions and releasing radiation.

On Monday, its operators began releasing low-level radioactive water into the sea to free up urgently needed safe storage space for water so toxic that it is halting crucial repair work.

The company has said it needs to dump 11,500 tonnes, or more than four Olympic pools' worth, of the radioactive liquid, raising concerns about marine life in the island nation, where seafood is a key source of protein.

Some radioactive runoff has already leaked into the Pacific Ocean, raising levels of iodine-131 to over 4,000 times the legal limit in one measurement.

On Tuesday, government chief spokesman Yukio Edano announced a legal limit of 2,000 becquerels per kilogram for radioactive iodine in seafood, the first time it has imposed such a restriction on fish.

"As there is no limit set for radioactive iodine in fish, the government has decided to temporarily adopt the same limit as for vegetables," he told a press conference.

The move came after radioactive iodine of more than double that concentration was detected in a variety of small fish known as konago, or sand lance, caught off Ibaraki prefecture, south of the plant.

Fishing of the species was stopped locally, media reports said, but no wider ban was issued.

Radioactive iodine above legal limits has been detected in vegetables, dairy products and mushrooms, triggering shipping bans, but officials had said seafood was less at risk because ocean currents and tides dilute the dangerous isotopes.

Fishermen in the area expressed outrage over the decision to dump radioactive water into the ocean, saying they had not been consulted.

"We were notified... Can you believe it?" said Yoshihiro Niizuma of the Fukushima Fisheries cooperative. "We heard radioactive material was leaking into the sea. Now they are dumping contaminated water on purpose."

Seoul also questioned the decision to pump radioactive water into the ocean, saying the proximity of the two neighbours made Japan's action "a pressing issue" for South Korea.

Fishing has been banned within 20 kilometres (12 miles) of the stricken plant, matching the radius of the evacuation zone on land, where tens of thousands of residents have been moved out.

The Yomiuri Shimbun on Tuesday reported TEPCO has decided to offer provisional damage payments to residents and farmers near the plant before official damage amounts are estimated later.

But the dumping into the sea of radioactive water has also cast concerns on the earnings of the fishery industry, and some analysts estimate TEPCO could face compensation claims of more than 10 trillion yen ($120 billion).

The company last week said it had secured 2 trillion yen in funding but warned that this would not be enough.

The wider economic fallout from Japan's triple calamity -- the massive March 11 earthquake, giant tsunami and the nuclear crisis -- is likely to drive the country into recession in coming months, said a survey of economists.

The disaster, which has left more than 12,000 dead and over 15,000 missing, has also hit exports, business confidence and consumer spending, the Nikkei daily said in the survey of 11 major private economic institutions.

On Tuesday, Tokyo police arrested two people for selling a drug they claimed would protect people from the radiation leaking from the plant.

The pair, a 50-year-old health food trader and his 29-year-old assistant, were charged with the unlicensed sale of a medicine, a police spokesman said.